Ingot We Trust

Gold ingots that is.

The time has come to admit the obvious, namely Obama, Bernanke, Geithner, Reid, Pelosi et al cannot be trusted with preserving our purchasing power and general well-being. Their solution to health care, unemployment, a stagnant, at best, economy and all other social and economic ills is to push the button that creates trillions of dollars and has them magically appear on the federal government's balance sheet.

To date prices of everyday goods have not reflected this fiendishness so there is still time to attempt to protect yourself from the consequences of a clueless, at best, in over its' head leadership in Washington. Just as it was obvious to everyone over 11 years old that the Mike Tyson who was the scourge of the heavyweight boxing world in the mid to late 80s would self-destruct so it should be just as obvious that these unfathomable amounts of money being created out of nothing must have dreadful consequences.

My guess is that inflation will start to sprout in the next few years and then blossom into at least a late 70s/early 80s event. Possibly a whole lot worse. Before that there could be some deflation as most consumers decide that saving and paying down debts is far more desirable than buying some nice but unnecessary item and producers respond by cutting prices and laying off more employees. Bernanke will likely react to this by getting in his helicopter and scattering dollars about the countryside. The longer this "seeding" doesn't work the worse the consequences when it does finally work. Again, Mike Tyson.

My suggestion for protection from all this is to start a systematic gold purchasing program. Gold has been a store of value for 4500 years and until early in the last century had always been a form of money. It is still recognized by the International Monetary Fund as one of the three "currencies" that can be used by countries for reserves. The other two being the Euro and the dollar. Unlike those two gold cannot be printed.

If you are over 59 1/2 and therefore able to withdraw from your retirement program without tax consequence I would suggest taking enough out every month to buy at least a one ounce gold coin.

Taking money out of your retirement before hitting 70 1/2 and have to begin withdrawing is probably a good idea anyway. If your retirement account is hefty the hickey you take from certain higher tax rates and likely higher mandatory withdrawals could be unpleasant.

One ounce platinum Maple Leafs are a good substitute every few months. They are about $600 more a coin but platinum is a rarer metal and since it has industrial uses, catalytic converters and oil refining to name two, it gets used up. Gold much less so.

If it's several years before everything hits the fan you'll have at least a small treasure chest to somewhat protect you from the forces unleashed by a bungling government and central bank. If you are under 59 1/2 I suggest systematically buying GLD and PTM and PALL (palladium) and SLV in either your IRA or regular stock account.

Today the forces of evil are exalted. Tomorrow comes the Wrath of the Lamb.

We're All Doomed (WAD)